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Richard Fedorak had an idea for a new medical test to help prevent colon cancer, one that appeared to have commercial value.

Fedorak is a doctor of medicine, a researcher with 400 published articles, and an international expert on intestinal disorders. But he had no experience as an entrepreneur, nor as a marketer, nor as a corporate executive.

No problem.

Just days before the publication date for an article on his test — one that would have put his method into the public domain — Fedorak was contacted by TEC Edmonton, a business accelerator that serves as a conduit for innovative technology developments at the University of Alberta.

The test developed by Fedorak and Dr. Haili Wang in UAlberta laboratories detects the presence of small, mushroom-shaped growths called polyps — potential precursors to colorectal cancer — in the colon of an individual, using a urine sample. People over 50 are most likely to be at risk for the disease, the world’s third most deadly cancer. Yet only 39 per cent of colorectal cancers are detected in an early and treatable stage.

According to Fedorak, a 1,200-patient clinical trial at UAlberta showed the urine test is 85-per-cent accurate at detecting precancerous polyps. By contrast there’s a five- to 30-per-cent chance that the decades-old standard test, examining fecal smears for blood, will spot the precancerous cells.

The standard test in use for many decades also fails the squeamishness test for the majority of patients — anywhere from 60 to 95 per cent of those presented with a test kit opt instead to throw it out, Fedorak said.

TEC Edmonton told him it could provide an opportunity to refine his research, attract investment, build a business and create jobs in his community.

He said yes. That was in 2008.

A company, Metabolomic Technologies Inc., was incorporated in 2010.

‘Perfect marriage’

Today, Fedorak is “a long way down the road” on what he describes, so far, as “a good ride” thanks to TEC’s support.

“It’s hard to say I couldn’t have done it without them, but I probably couldn’t have done it without them,” Fedorak reflected.

“We have a commercial product. It’s called PolypDx, that’s commercial and usable now. We’re fine-tuning it. We plan to have that available in the first quarter of next year.

“Right now, it costs $50 to $100 per test to screen urine for precancerous polyps. My aim would be that you can walk to the drugstore, like a pregnancy test, and buy it — and get the price down to $10, $20, something people can afford.”

That’s the ballpark price for a standard fecal test, he noted.

“We have some more work to do but we do have a commercially valuable test at a price point that hospitals and provinces are OK with.”

He credits TEC Edmonton for supporting his ambitions.

“To me it was one stop — got to TEC Edmonton and they had the expertise. It’s the perfect marriage for an academic who is interested in commercializing a concept.”

TEC was established seven years ago as a joint venture of UAlberta and the city of Edmonton to provide support to early-stage companies and entrepreneurs.

Traditionally, universities have patented promising technologies, and then licensed them to third-party multinationals. That generates a short-term cash stream but there’s no long-term economic benefit to the community.

UAlberta believed it could fulfil its “public good” mandate by commercializing research locally.

University spinoffs

Each year, roughly 80 companies pass through TEC’s doors. About a third of those it mentors every year arise from UAlberta research. The rest originate in the private sector, TEC chief executive officer Chris Lumb explained.

“The university spinoffs are created usually by a researcher but frequently they don’t leave the university. They would be the chief scientific officer of the company, and they hire a CEO who is more commercially focused,” Lumb said.

“We think that is the right way to do it. If the researchers think the only way they can become an entrepreneur is to leave behind their faculty position, that makes them disinclined to think about commercialization.”

The businesses coming through TEC’s doors each year represent just about any kind of technology enterprise you could imagine — including oilfield equipment, biotech, agriculture, nanotech.

There are 10 executives-in-residence, supported by a team of business associates — interns.

Last year, TEC made a concerted effort to gauge the success of its programs, collecting feedback from 74 of about 85 clients.

“The survey found that the companies had generated $73 million in revenue, about half of which was export revenue, which we thought was pretty good (because it meant) we weren’t just serving local markets,” Lumb said.

“In addition to that, they raised $27 million financing in that year, and did $17 million of R&D, and grew their employment from 600 to 750 people. Those numbers were better than we thought. We didn’t expect that much direct outcome right away, in one year.”

Of that $73 million, sales accounted for $61 million and grants accounted for the remaining $12 million.

“It was spread all across sectors and all across companies. The youngest and smallest companies added the most jobs and the financing was pretty much spread evenly across a whole range of different companies.”

Lumb notes that at the time of TEC’s inception, no other business accelerator in North America was merging university intellectual property, civic- and university-based services for entrepreneurs.

“It underscores the focus of the university leadership and the city leadership in answering ‘How do we really promote a culture of entrepreneurship and put things in place that will result in a growing number of early-stage companies, started and supported?’ ”

Mike Volker, director of Simon Fraser University’s innovation office, is seeing universities across the world take a more aggressive approach to commercializing innovation.

He has been at SFU since 1996 and he’s also active in the Vancouver-area angel investor community. Angels tend to be successful entrepreneurs who are looking to invest the stacks of cash they earned by selling their own companies, and are looking to invest it in start-ups that could eventually generate huge returns.

Volker spent five weeks in Australia over Christmas, meeting with officials at Griffiths University, a top-ranked innovator in the Asia-Pacific region that conducts exchanges with SFU, and with Australian investors.

While there, he encountered an angel investor group from Texas which was doing the same thing he was — looking for opportunities.

“It was interesting to see how universities are getting involved globally in working closer with business groups, with investors especially. They are all trying to cultivate relationships with investors, especially alumni who have become successful and can give back to the community by both supporting the universities and supporting innovation through investment in startup companies and this kind of thing,” Volker said.

“This is something we didn’t see 10 years ago. The odd institution was trying to set up spinoff companies but mostly they were just trying to get licences. But now this has changed a lot.

“Universities are becoming more and more engaged in dealings with industry organizations, angel investors, investors in general. Most universities now have accelerators and incubators. Interestingly, they’re not just for (enterprises) that come out of those institutions.”

More often, Volker said, the inherent value of a startup resides with the entrepreneurs, including students. A single-minded effort to commercialize a patent could slow you down.

“The idea that it all starts with research and licensing that research is all going by the wayside and people are realizing that it’s really the know-how students have, usually inspired by professors and research.

“Universities are realizing that it’s really the graduates, the students, that have the fresh ideas. Those ideas may have (arisen) as a result of working with researchers, and of course usually they are, but it’s the students that are in a good position to start these companies because they don’t have any pressing demands on them.

“The idea that research produces intellectual property that is then licensed, I think that whole notion is antiquated.”

One thing that hasn’t changed in Canada is the notion that the best ideas are more likely to arise in public venues such as universities and government-funded research labs, compared to the United States where the private sector takes the lead in innovation.

Richard Remillard, executive director of Canada’s Venture Capital and Private Equity Association, said it would be “a good thing” for more investing opportunities to emerge from ideas generated in the private sector.

As a result, many of Canada’s top venture capital funds and angel investors maintain a focus on early-stage investments in opportunities arising from university research and development.

“You have in the U.S., particularly in certain markets like Northern California, Silicon Valley, Cambridge-Boston Mass., a high concentration of high-tech giant firms have spun out lots of people who just make lots of money. When they leave Google, they invest in other early-stage tech companies,” Remillard said.

“In Canada, because of the nature of the economy, because of the nature of the tech industry, we haven’t had even proportionally the same high concentration of big super-success stories that spun out large numbers of angels.

Relative to the U.S., a higher proportion of R&D in Canada seems to be conducted by government-funded entities of some sort and the private sector is less of a presence, he said.

“That’s a concern that all sorts of folks have expressed and from our perspective, we’re in the business of getting quality deal flow and if the flow is thinner than it should be then that’s a concern.

“You want to have access to the most, to the best deals and a lot of times they come out of the universities but out of the business sector too? That would be a good thing to have.

“From our perspective, give me more, better deals.”

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